It has been a very long time coming, but it has been well worth the wait. Ry Cooder can never be accused of being a slouch when it comes to musical output, but in recent years he has seemed far too much of an enthusiast for other people's work to release an album solely under his own name. Instead, there have been a whole series of production credits and collaborations, from his award-winning duets with the Malian guitarist Ali Farka Touré through to his dramatically commercial intervention in the Cuban music scene with the Buena Vista Social Club, and such impressive spin-off sets as his more recent collaboration with the Cuban guitarist Manuel Galban.

Those who remember and enjoyed the earlier Cooder, with his slinky, rhythmic all-American blend of blues, country and south-of-the border styles, may have feared he had given all that up for good. After all, it's been 35 years since his first solo set, and a quarter of a century since the rousing Bop Til You Drop.

Now, at last, there's a new Ry Cooder album - or, to be more precise, "record by Ry Cooder". That rather grand title has echoes of the way Hollywood directors like to be credited, and there's more than a touch of Hollywood about this gloriously varied, intriguing set. For a start, it's a grand-scale concept work, rather than merely a collection of songs, and it has been constructed like the soundtrack to some non-existent musical. It's a very clever album, and at times easier to admire than to simply enjoy because there is so much going on.

The story is potentially strong, and goes right back to Cooder's early roots, when he grew up in Los Angeles. Back in the early 1950s there was an area of the city known as Chavez Ravine, which was home to Mexican and other immigrant groups; it is portrayed here as a cultural melting-pot that was destroyed by the authorities, making it sound like an American equivalent of such apartheid-era South African neighbourhoods as Johannesburg's Sophiatown.

Chavez Ravine was wrecked to make way for neatly ordered white neighbourhoods and the LA Dodgers' baseball stadium. Here, the story of the neighbourhood's destruction and the dirty dealings involved is told through characters both real and imagined. There's the victim of an anti-communist witch-hunt (this being the era of HUAC, the notorious House UnAmerican Activities Committee), a bulldozer driver employed to knock down the slums, or (more strangely) the pilot of a passing UFO, who sets down in the neighbourhood, attracted by the music on his radio.

As a drama, it's all bit of a mess, but the music is magnificent: brave, varied and atmospheric. Cooder has created a powerful sense of time and place by mixing his new compositions with anything from late 1940s and 1950s pop songs, in both English and Spanish, through to blues, ballads and a variety of Mexican styles. He plays on all but one of the 15 tracks (anything from guitar to the Cuban tres or the Tex-Mex bajo sexto), wrote or co-wrote seven, and sings on four of them.

Supposedly unsure of his vocals in the past, he handles anything from the slinky, bluesy demolition song It's Just Work for Me to the cool late-night jazz of In My Town (including a half-spoken section with echoes of Tom Waits), and even the menacing, theatrical Don't Call Me Red, which sounds like an excerpt from a jazz musical influenced by Kurt Weill.

Mixed in alongside all this there's Tex-Mex dance music, the conjunto styles, through to sturdy narrative ballads, the corridos, and a revival of the music and even the singers from the Chavez Ravine era. Here, Cooder is acting much as he did in Cuba with the Buena Vista Social Club. He's reviving great old songs, and - even more importantly - involving some of the original artists.

The songs that would have been heard across the Chicano community include the charming Chinito Chinito, a 1949 novelty piece (in Spanish, of course) that concerns a Chinese laundryman. Then there's a burst of English-language pop, with a rousing and witty treatment of Lieber and Stoller's Three Cool Cats, with vocals from the veteran Willie Garcia who, under his stage name Little Willie G, led the 1960s East LA R&B band Three Midniters in the days before he became a preacher.

Then there are songs from an even more distinguished veteran, Lalo Guerrero, who was once known as "the original Chicano hepcat" and named as a "national folk treasure" by the Smithsonian Institute for his 60-year career singing for and about the American-Mexican community. Here, Guerrero revives his own jaunty 1949 dance song, Los Chucos Suaves, and his sturdy ballads Corrido de Boxeo and Barrio Viejo, on which he's joined by the great Tex-Mex accordion player, Flaco Jimenez. Guerrero died earlier this year at the age of 88, and this brave, wildly original album stands as a memorial for him as much as for the long-lost neighbourhood of Chavez Ravine.